(CN) — Argentina’s primary elections shocked the nation this month, as President Mauricio Macri and his right-wing coalition was trounced by the left, 47% to 33%. Voting is obligatory in Argentina; primary voters chose candidates for the Oct. 27 general election.
The Argentine stock market crashed and the peso lost 30% of its value after the Aug. 11 primaries dealt a severe blow to the Argentine right.
President Macri, in office since 2015, now faces an election that the Argentine press predicts he will lose, reinstating the left-populist coalition Macri defeated four years ago.
The primary election showed Macri far weaker than anyone thought. Argentine pundits say the main reason for the dramatic defeat was rejection of the austerity program that has brought poverty to 40% of the population. He did especially poorly among young voters who are clamoring for change and for decent jobs.
The Peronist party coalition also collected 49.34 percent of intended votes for the Buenos Aires governorship, 117 of 257 projected seats in the House of Representatives, and 36 out of 72 spots in the Senate.
Argentina’s primary elections measure voter intention, helping parties refine campaign messages and consolidate alliances with smaller political actors, if they need to.
Macri responded to the shocking loss by increasing welfare payments to the 20% of workers who are unemployed, and eliminating the 21% sales tax on food. But few believe those measures will resuscitate his dismal prospects heading into the general election.
Argentine production, consumption, employment and wages have all fallen along with the currency. Consumer price inflation in 2018 was 47.6 percent, the highest 27 years, but Macri has refused to reconsider his economic program.
Cambiemos (Let’s Change), his political party, believes austerity is not just a remedy to domestic issues but an essential means of integrating the country into the machinery of global capitalism.
Unlike the rest of Latin America, Argentina is 95% white, its inhabitants descended from Italy and Spain, England and Germany. Like the United States, it went to war with its Native population in the 19th century, then rapidly industrialized and became a wealthy nation.
Now a major player in the world economy, Argentina manufactures and exports electronics, heavy equipment, cars and agricultural products: soybeans, wheat, corn, beef and wine. But Honda, Volkswagen and Peugeot are cutting hours and laying off workers; the cost of imports has risen sharply and the income from commodity exports has plunged.
Until the primaries, Macri was expected to win the October election easily, with an electorate willing to endure more austerity and financial pain. But voters upended expectations and now Argentina is looking at a center-left government, with former president Cristina Rodriguez de Kirchner as vice president this time, though few doubt she will be the one in charge.
Those who can afford it are trading their increasingly worthless Argentine pesos for high-priced dollars, putting even more downward pressure on the peso. Aside from Venezuela, Argentina has the worst performing currency in Latin America, losing nearly one-third of its value in the past week.
Today, as for many years, the country’s borrowing has crippled economic growth. The International Monetary Fund has covered Argentina’s debts — with a repayment plan that requires cutting social spending. The result has been a dramatic increase in poverty, with an estimated 40% of the population living in poverty, according to the mainstream newspaper Clarín.
Argentina is the most indebted country in Latin America, according to the International Monetary Fund.
Yet according to Bloomberg news service, Macri, 60, has restored credibility to Argentina and earned the support of the international community, including U.S. President Donald Trump and the International Monetary Fund. Reestablishing ties with the IMF allowed Macri to reconnect with ruling economic hubs and introduce a powerful external actor that can help discipline political and popular demands in the country and push through his neoliberal program — by loading the country with debt.
According to Ricardo Kirschbaum, editor of Clarín, Macri made a terrible mistake: He became angry and blamed the economic disaster on his political enemies and warned that the country is in danger of returning to authoritarianism if he is not re-elected.
Now it appears he won’t be.
Argentina was slowly recovering from a crippling recession that caused inflation and unemployment to soar as the nation’s currency plunged. A mix of factors, including an historic drought, policy mistakes, market selloffs and massive corruption has dragged the country into a major downturn during Macri’s presidency.
The re-emergence of a left government in Argentina will complicate President Trump’s policy goals in Latin America, especially with respect to isolating Venezuela and Nicaragua and Cuba. And it may signal a return of the pink tide in which Latin American countries struggle to combat the crushing austerity of neoliberalism.
(Courthouse News correspondent Miguel Patricio is based in El Salvador.)